The Watford-based lender says unregulated loans - until recently the majority of its lending book - are now in the minority compared to regulated. It claims that this change has been partly caused by a sharp rise in demand for the 'classic bridge' regulated loan, where the time gap between the purchase of a new residential property and the sale of the customer's existing home is bridged.
The lender says that the shift, which has seen regulated loans rise to 60% of all Cheval completions in the three months to September, has been nothing short of remarkable. It is claimed to be the result of the downturn in commercial property and a much lower appetite for risk on the part of investors.
Cheval CEO Alan Margolis said: "The figures show that short-term bridging finance is now being predominantly used for what we call the 'classic bridge'. It does seem that there is a shortage of good quality residential property and a great deal of competition among buyers. By astutely using bridging loans, borrowers are able to quickly secure their target property.”
